Accounting: Financial Accounting
BACC 2401
Fall 2009
Full-Time MBA Program
Harry Evans
238A Mervis Hall
648-1714
E-MAIL: jhe@katz.pitt.edu
Office Hours: Feel free to see me in my office. Alternatively, use e-mail or a phone call to leave
me a message, and I will get back to you promptly.
Secretary: Ms. Joan Ballas (648-1436), 238 Mervis Hall, jeballas@katz.pitt.edu
Teaching Assistant: Mr. Patrick Martin, doctoral student in accounting, prmartin@katz.pitt.edu
Syllabus
Course Title:
Credits:
TEXT:
BACC 2401, Financial Accounting
3
Financial Accounting by Stickney, Weil, Schipper & Francis 13th edition,
Thomson-Southwestern, 2010.
LECTURE NOTES Available on web via Blackboard.
SUPPLEMENTS: PPG 2008 Annual Report - will be distributed and used as a source of
firm practices at various points in the course.
PREREQUISITES: Determination, intellectual curiosity, and a “take ownership” attitude.
COURSE OBJECTIVE/DESCRIPTION: This course is designed to enable managers to
understand and use financial accounting information i.e., to be able to speak in terms of general
relationships, as well as to understand the more important technical details. To maximize your
returns from this course, you must think conceptually, i.e., you must see the unifying themes
that organize the accounting details.
How to access Blackboard
http://courseweb.pitt.edu
Type your University Computer Account username and password (as described during MBA
Orientation) and click the login button. If you do not know your username and password, you
can get them at any university computer lab with your ID card. The closest lab to Mervis Hall is
across the street in Posvar Hall.
BLACKBOARD = COURSEWEB – web-based course information from your instructor;
once you are in Blackboard
 Syllabus – see “Syllabus”
 Detailed assignment notes – see “Assignments”
 Lecture notes – see “Course Documents”
 Recent prominent accounting articles – see “Course Documents”
BEYOND THE TEXTBOOK – Besides our excellent text, we will also learn from:
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A. “Be prepared” - the Summary Assignment Schedule lists text material you are to study and
“Be prepared” to discuss in class. Assume that you are the manager responsible for the firm
or firms in question. Prepare to answer questions from your boss, your firm’s board of
directors or financial analysts. You will learn by using your accounting knowledge.
B. Homework – One MLT will be assigned to most homework assignments. That MLT’s job is
become experts in the particular context of the assigned problems.
C. Lecture Notes – on Blackboard; you may add notes in class on the slides either on your
computer or on a copy of the lecture notes that you print out.
D. IFRS (International Financial Reporting Standards) – firms around the world are either
using IFRS now or shifting to IFRS soon. U.S firms appear likely to join the process soon,
so we will study IFRS and how they compare to US GAAP (Generally Accepted Accounting
Principles).
E. Wall Street Journal – I recommend that you subscribe, read, and relate to our course.
F. Accounting Scandals - Many recent news stories describe corporate accounting problems. I
will post a set of readings on Blackboard covering a sample of such firms, including
WorldCom. You should read the articles in light of the following issues:
1.
Describe how each of the sample firms’ practices violated GAAP.
2.
Compare the firms’ practices in terms of how clearly and unambiguously they
violated GAAP. That is, discuss whether some practices could be defended as
aggressive but acceptable.
3.
Describe the mechanisms that exist to control such accounting problems and how
they operate. Include ethical behavior of managers as one of the mechanisms.
GETTING ADDITIONAL ASSISTANCE: Help is available in various forms including the
following. The key is to act quickly and aggressively to stay on track.
 Feel free to see me before or after class, at my office (238A Mervis) or email me
(jhe@katz.pitt.edu).
 Solutions to Assigned Problems – Solutions to all problems (assigned and other) are
available on Blackboard.
 Help sessions - Mr. Patrick Martin (prmartin@katz.pitt.edu), a Katz accounting doctoral
student, on Fridays – time and location will be announced. These sessions will focus on
answering your questions and reviewing key material rather than introducing new material.
Check the Katz calendar in case the help sessions are pre-empted for a special event.
 Working with other students in the class, perhaps from your MLT. Another student often has
the best insight into your questions.
EVALUATION METHODS*:
Midterm exam #1……………….… 30%
Midterm exam #2……………….… 30%
Comprehensive Final exam……….. 40%
* Class participation (e.g., be prepared), and homework will be considered in borderline cases.
Homework grades are: + (complete and correct), (generally complete and correct),  (significant errors or omissions), L (late).
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ACADEMIC INTEGRITY: I consider academic integrity to be extremely important. I expect
you to feel the same way. All work on exams must be your own. I encourage you to compare
homework solutions with your study group, so long as all students contribute. I request that you
do your assignments in pencil and that any notes you make in class on your assignment be done
in pen.
DISABILITY
If you have a disability for which you are or may be requesting an accommodation, you
are encouraged to contact both your instructor and Disability Resources and Services
(DRS), 216 William Pitt Union, (412) 648-7890/(412) 383-7355 (TTY), as early as possible
in the term. DRS will verify your disability and determine reasonable accommodations
for this course.
SUMMARY ASSIGNMENT SCHEDULE
MEETING
DATE
READINGS
(to be completed prior to class)
1
Tues.9/1
Ch. 1: Introduction
Ch. 2: Accounting Cycle and
accounting procedures
2
Thurs.9/3
Ch. 3: Balance Sheet
3
Tues.9/8
Ch. 4: Income Statement
4
Thurs.9/10
Ch. 5: Statement of Cash Flows
5
Tues.9/15
Ch. 5: Statement of Cash Flows
6
Thurs.9/17
Ch. 6: Financial Statement
Analysis
7
Tues.9/22
Ch. 6: Financial Statement
Anal.
Ch. 7: Receivables
NOTES AND WRITTEN ASSIGNMENTS
(To be turned in except when noted otherwise)
1-18,19,20,26,33 (Today’s questions are for
discussion and will not be collected).
Be prepared to discuss Siemens AG-see
problem 1.1 for Self-Study, p.21. The
solution begins on p.29.
2-12,27,34 (use T-accounts for 2-34), 35 (use
T-accounts for 2-35)
MLT 1/MLT 2/MLT 3
Be prepared to discuss problems 2-34 and 235, which relate Regaldo’s Department
Store’s economic events to their Balance
Sheet and Income Statement.
3-12,14,22,24 MLT 6/MLT 4/MLT 5
Be prepared to discuss problem 3-35, p.142144, which compares the Balance Sheets of
six prominent firms.
4-11,13,18,30 MLT 8/MLT 7/MLT 9
Be prepared to discuss Exhibits 4.3 – 4.6,
p.161-163, which compare revenues and
expenses for four prominent retail firms.
5-22,23,25,42
MLT 11/MLT 10/MLT 12
5-33, 34,43 MLT 13/MLT 14/MLT15
Be prepared to discuss Exhibit 5.15, p.211,
which compares cash flows for four
prominent firms.
6-11,13,14,16
MLT 17/MLT 16/MLT18
3
8
Thurs.9/24
Ch. 7: Receivables
6-17,19,25 and 7-31,34
MLT 19/MLT 20/MLT 21
Be prepared to discuss problem 6-27, which
analyzes the profitability and risk of Target
Corporation.
Look over problem 7.1 Self- Study, p.315,
which examines revenue recognition issues
for Sony and Best Buy.
Integrate chapters 1-6
2008 first midterm exam – to be completed
prior to class to evaluate how well prepared
you are. Problem will not be collected.
Bob Kelly, Chairman & CEO of The usual Friday help session will meet on
the Bank of New York Mellon – Thurs. during normal class period.
9am “Thought Leaders in
Business”
Midterm Exam 1 - Chapters 1-6 8:00 – 10:30am
-closed book, closed notes
Ch. 8: Working Capital,
8-22,26 MLT 22/MLT 23/MLT 24
Inventories
For all problems in the remainder of the
course, I recommend that you use T-accounts
rather than journal entries.
9
Tues.9/29
X
Thurs.10/1
10
Fri.10/2
11
Tues.10/6
12
Thurs.10/8
Ch. 8: Working Capital,
Inventories
13
Tues 10/13
Ch. 9: Long-Lived Assets and
look over sample average ratios
by industry on Blackboard
8-31,37,38 MLT 26/MLT 25/MLT 27
Be prepared to discuss VAF handout
problem; finish any parts that were not
completed in class
9-14,19,20 MLT 30/MLT 28/MLT 29
Be prepared to discuss Nordstrom’s Balance
Sheet in Exhibit 1.1 (p.8) and Scania’s
Balance Sheet in Exhibit 1.5 (p.12-13).
14
Thur 10/15
IFRS (International Financial
Mr. Jack Klingler from Alcoa Corporation
Reporting Standards)
will lead our discussion of IFRS.
15
Tues.10/20
Ch. 9: Long-Lived Assets
9-24,27 MLT 32/MLT 31/ MLT 33
Be prepared to discuss Exhibit 9.3, p. 444,
which analyzes WalMart’s use of fixed
assets.
16
Thur10/22
Ch. 10: Liabilities – Bonds and
10-20,21 MLT 35/MLT 34/MLT 36
Leases
Use T-accounts to show entries when bond
issued and at first two interest payments.
NO CLASS ON TUES OCT 27 BECAUSE OF CAREER TREKS
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Thurs.10/29 Ch.10: Liabilities – Bonds and
10-28,34 MLT 37/MLT 38/MLT 39
Leases
Be prepared to discuss Exhibit 10.7 (p.485)
which compares the accounting for operating
versus capital leases.
18
Tues.11/3
Ch. 11: Other liabilities
11-28 MLT 1/MLT 2/MLT 3
Be prepared to discuss Exhibits 11.11 –
4
19
Thurs.11/5
Ch. 11: Other Liabilities
20
Tues.11/10
Ch. 12: Marketable Securities
and Derivatives
X
Thurs.11/12
21
Fri. 11/13
22
Tues.11/17
23
Thurs.11/19
24
25
26
27
28
Week of
Dec 1418
11.13, p.538-540, dealing with Burns
Corporation’s deferred income taxes.
.
12-12,15,18
Work the 2008 second midterm exam. Be
prepared to discuss the exam in class but your
work will not be collected
The usual Fri. help session will meet on
Thur. during normal class period.
EXAM 2 on Chapters 7-11 (also 8:00 – 10:30am
relying on material from
Chapters 1-6)
Ch.13: Investments
13-15,16,21 MLT 6/MLT 4/ MLT 5
Discussion of PPG 2008 annual Be prepared to apply course knowledge to
report
PPG annual report.
Tues.11/24
Class discussion of readings on Be prepared to discuss accounting and ethics
Accounting and Ethics
material.
Weds. 11/25 – Sun. 11/29 – THANKSGIVING RECESS
Tues.12/1
Ch. 14: Shareholders’ Equity
14-22,24,30 MLT 8/MLT 7/ MLT 9
Thur.12/3
Ch. 14: Shareholders’ Equity
14-33 MLT 11/MLT 10/MLT 12
Ch. 15: Another Look at SCF
Be prepared to discuss Exhibit 14.6 on page
694, based on Citigroup’s Statement of
Changes in Shareholders’ Equity.
Tues.12/8
Ch.15: Another Look at SCF
15-13 MLT 13/MLT 14/MLT 15
Ch 16: Synthesis
(Two notes: in part (7) of the problem itself,
“$4,000” should be “$15,000” and in the
solution “Interest Expense Greater than Cash
Paid for Interest” should be “Interest Expense
Less than Cash Paid for Interest”)
Be prepared to discuss problem 16-3. First,
for each question, think about where to find
relevant information on the Balance Sheet
and Income Statement.
Thurs.12/10 Review
Be prepared to discuss Mosenbirlin
comprehensive review problem; will not be
turned in.
Comprehensive final exam – date and location to be announced
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